it looks like mav88's questions were answered. Thats good. I had no questions, and no nobody here has provided any effective counter argument to my points In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill Clintonââ¬â¢s merry rule. It fell to a low of $794 billion in 2003 after Mr. Bushââ¬â¢s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again. jonbig, I don't know where you got that dumbass info, but the Bush cuts didn't even take effect until 2003. All this shows is that the Clinton revenue gain was a windfall of cap gains from the stock bubble. This is common knowledge. After 2003, there was a 'surprising' bump in revenues, that is the brilliant liberal economists thought tax cuts meant that much lost revenue exactly. Buffet isn't well versed on economics, we all know that. played that game a few days ago: "A genuine issue of fairness does arise when one questions why capital gains and dividends are taxed at a lower rate than the marginal income of a married person making as little as 65,100. Why should "sitting on your ass income" be given preferential treatment to "working" income? ('Conservatives' habitually spew an abundance of ill-conceived "answers" to this query.) Warren Buffet is unusual in the world of rich white guys in that he interconnects this question to a wide public audience. The amount of progressivity in the income tax system could be attenuated by recognizing a simple mathematical truism: $1=$1, regardless of the origin. Of course, that would mean raising cap gains & dividend taxes...but, fair is fair & $1=$1." This is something that may surprise you: in liberal-land, all cap gains are 'sitting on your ass' income. In reality though taxing cap gains is a direct tax on economic production. That's why they are lower, smarter people recognize that taxing cap gains too high is punative and destroys economies. Every dollar is not equal , dollars that go into capital equipment are far more useful than dollars spent keeping granny alive at the nursing home. In trader lingo, it's called return on investment. Typical liberal bullshit, and they sure do run away from this argument when they realize that they would have to tax the shit out of the one thing that most americans can make money on- the sale of their house. I'm sorry libs, but your pathetic populist arguments backed by your fallacious reasoning and anecdotal evidence is tripe. jonbig thinks that making a dollar means that you took it from someone else! pretty much sums it up. Here is a real study: http://www.taxfoundation.org/files/wp1.pdf While the U.S. tax system is progressive, the distribution of government spending makes the overall fiscal system more progressive than is apparent from tax distributions alone. Using a microdata model we estimate the distribution of federal, state and local taxes and spending between 1991 and 2004. We find households in the lowest quintile of income received roughly $8.21 in federal, state and local government spending for every dollar of taxes paid in 2004, while households in the middle quintile received $1.30, and households in the top quintile received $0.41. Overall, tax payments exceeded government spending received for the top two quintiles of income, resulting in a net fiscal transfer of between $1.031 trillion and $1.527 trillion between quintiles. Both taxes and spending appear to have large distributional effects on households, and these effects have grown since 1991. The results suggest tax distributions alone are an inadequate measure of progressivity, and policymakers should examine both tax and spending distributions when judging the overall fairness of policy toward income groups. The system is more than fair, lok at figure 3 on page 24 if you don't want to read much. It pretty much blows away all the arguments put forth by the libs. What libs really want though is socialism pure and simple. They won't be happy until we are all miserable. Like children they can't stand the idea that there are winnners and losers. Very dangerous! The paretto principle is generally true. About 10% of us are responsible for all the creative progress of civilization. It's been shown over and over again that going after the top productive folks only sinks everyone. I agree that not all high income people are genuine producers, but I guarantee that all producers are high income. Here we go down the liberal Obama shitter, thanks you retards.
posted again for emphasis Overall, tax payments exceeded government spending received for the top two quintiles of income, resulting in a net fiscal transfer of between $1.031 trillion and $1.527 trillion between quintiles
Alan Blinder weighs in on what happens when cap gains are treated as income (the $1=$1 scenario I suggested): "BUT would taxing capital gains like other types of income imperil our economy? No. The Tax Reform Act of 1986 did exactly that, and it did not end capitalism as we know it. In fact, the gross domestic product in 1987 and 1988 grew at about the same rate as in 1985 and 1986, and the investment share of G.D.P. barely budged." http://www.nytimes.com/2007/07/29/b...a4a0b4227&ei=5090&partner=rssuserland&emc=rss Psst...the Tax Reform Act of 1986 was passed during the Reagan Administration. Damn liberals!
One big problem with comparing Cap gains tax rates of the 80's with today is that globally, cap gains tax rates have dropped significantly in general. Raising rates here WILL result in capital flight. The amount is unknown. Also, it is generally accepted by most economists (not all), that raising rates will result in less revenue, and Obama acknowledges this. He is doing it to be "fair" Note, this is not the same as the Laffer Curve argument based on income taxes, but instead based on directly observable stats from the last two changes in cap gains. One lower, one higher. LOTS of data on the net on this.
I wouldn't go so far as to say that this viewpoint is 'generally accepted'. Certainly not by the Congressional Budget Office and the Joint Committee on Taxation. Can you substantiate your claim that this viewpoint is held by most economists? http://www.cbpp.org/policy-points4-18-08.htm http://time-blog.com/curious_capitalist/2008/01/do_capital_gains_tax_cuts_incr.html
Too funny. Look at the date of Blinder's NYT article. Right on the July/07highs. If I were you I'd review my history of the American economy from 1987 through the mid-90's . This is what I remember. A stock market crash of 22% in a single day in Oct/87. Another mini-crash in 1989. A recession that was WORSE than this one in terms of job losses from 89-91. Home prices in Los Angeles breaking 42% in the early 90's and remaining off their peak for the entire decade. Real estate prices in the southwest plunging precipitously enough to sink hundreds of savings and loans. An exodus from domestic farming and energy development that bears some responsibility for the tight supplies we see today. Yea, real boom time. I'll repeat again since guys like you and Barrack Obama don't get it: It's not 2007 anymore. The reason Obama coupled with a Dem Congressional majority will fail is they just don't want to admit, it's over. There's a 10x better chance of seeing the G8 agree to coordinated currency devaluation in the next 18 months than Congress or the BOJ finding the money for it's Chavez like wants. All of this talk about the revenue side is dangerously fallacious. There ain't no revenue. If you think the Obama magic answer is going to be increased taxes with a "scalpel" to existing programs-the meat of which can't be cut an iota-then you'd better load up on Krugerrands and bottled water. Does anyone here see athletes and CEO's making the same 2010 comp as this year? Raise your hands. The rest of America? They're trying not to lose their home as their township defaults on some school bonds. Good luck though with that new age tax and spend.......
And what, exactly, do you propose we do? It's pure fantasy to suggest that spending can or will be cut by the amounts needed to cover even the present deficit - let alone future liabilities from SS and Medicare. Taxes are going up. The reason they're going up is because the Republicans have been pulling the same political trick for thirty years, telling us that we can have our cake and eat it too. All the money borrowed to finance the Reagan Debt Revolution will need to be repaid. In the 1950s, the top marginal rate of income tax was 90%. We all survived, matter of fact I hear those decades were quite prosperous for all concerned. Tax rates will be testing those highs again and we'll survive, just like last time.
Here's what *I* get when I review American stock market history: S&P 500 Total Return (1987-1995): +10.93% CAR S&P 500 Total Return (past 8 years): -4.35% CAR Are you attributing these events to the capital gains tax rate adjustment included in the Tax Reform Act of 1986? If not, your rant is utterly meaningless in the context of this conversation. No shit? Hey, thanks for the news flash. BTW, I'm still waiting for your point by point response to my Exxon post. http://elitetrader.com/vb/showthread.php?s=&postid=2129775&highlight=exxon#post2129775
Alan Blinder weighs in on what happens when cap gains are treated as income (the $1=$1 scenario I suggested): "BUT would taxing capital gains like other types of income imperil our economy? No. The Tax Reform Act of 1986 did exactly that, and it did not end capitalism as we know it. In fact, the gross domestic product in 1987 and 1988 grew at about the same rate as in 1985 and 1986, and the investment share of G.D.P. barely budged." http://www.nytimes.com/2007/07/29/b...serland&emc=rss Psst...the Tax Reform Act of 1986 was passed during the Reagan Administration. Damn liberals! That was an overall cut though, top overall marginal rates were lowered. It's true that Cap gains was raised, i agree but there was much more to that bill than that. Look at cap gains effective rates, which are a much better measure than top marginal. Effective rates tell you what people really end up paying: http://www.taxfoundation.org/files/fedcapitalgainstaxcollections-20070523.pdf notice that 68-81 was a period of slightly rates higher than either previous or after (with a much higher top marginal), note that the 70's was a period generally regarded as sluggish. Notice that after the 86 effective rate increase, actual revenue (realized gains as a percent of GDP) as a percentage of GDP went down. Note the huge bulge in federal revenue before the increase. Note again the rather large increase in federal revenue after the cap gains cut in 97. Democrats and liberals claim that humans for some reason don't react to tax rates, the data says otherwise. I don't think that a few percentage points kill capitalism, but that not what we are talking about here. With the liberal class warfare rhetoric having successfully convinced the 1/3 of americans, who produce nothing, that they are entitled to a larger and larger 'fair share', we are looking at massive shortfalls in revenue to pay for all the 'sit on their ass' folks who collect welfare. Real data shows that the rich shoulder this burden in a progressive fashion, but fair keeps getting redefined. Roughly 2 Trillion bucks is now transferred per year to the sick, lame, and lazy. It is set to grow much faster than GDP over the next 50 years. This is the threat. For some strange reason, liberals hate the guy who sits on his ass because he made his own cash and lives off it, but love the guy who sits on his ass collecting other people's cash.